Booksellers Testify in Support of E-Fairness Legislation

As the sales tax fairness fight continues to gain momentum nationwide, on Monday, March 28, booksellers in two states testified before legislative committees about pending legislation.

In Connecticut, Suzanne Staubach, manager of the General Books Division of the UConn Co-op [1], was among those who testified before the Connecticut Finance, Revenue, and Bonding Committee, and in Texas ABA Board member Steve Bercu, co-owner of BookPeople [2] in Austin, was among those testifying before the state’s House Committee on Ways & Means.

Also testifying on behalf of the affiliate nexus sales tax equity legislation in Connecticut were Tim Phelan, president of the Connecticut Retail Merchants Association (CRMA), and Dan Cullen, ABA’s content officer. CRMA and ABA have been working together to help pass sales tax fairness legislation in Connecticut, and Cullen spoke on behalf of all ABA bookstore members in the state.

In both Connecticut and Texas, legislation has been introduced that, if passed, would require remote retailers with nexus in the state through online affiliates acting as sales agents to collect and remit sales tax on orders made by the states’ residents. Currently, residents in Connecticut and Texas must submit a use tax on these out-of-state orders.

“Once again, booksellers have shown how important – and how impactful – their participation in the political process can be. We are very grateful that they and  their retail colleagues took time out of their busy schedules to attend the committee hearings in Texas and Connecticut,” said Oren Teicher, ABA CEO. “Their first-hand testimony regarding the critical importance of sales tax fairness legislation will help legislators realize the economic realities and the importance of addressing this issue in order to bring about important change.”

In her testimony, Staubach pointed out that indie bookstores in Connecticut collected hundreds of thousands of dollars in sales tax needed to fund “schools and roads and other services” and that the revenues in-state bricks-and-mortar bookstores generate “go to back into our communities.” Noting that the affiliate nexus legislation being considered, HB 6624, is not a new tax, Staubach testified that “we operate at a competitive disadvantage compared with retailers, such as Amazon, that do not collect sales tax. Our customers abandon us in order to save the six percent [in sales tax]. If Connecticut sales tax is increased, and this situation is not remedied, the disparity will be even greater.”

In his testimony before the Texas House Ways & Means Committee, Bercu told BTW he stressed that the proposed e-fairness legislation would not only “level the playing field” but that it “was also a jobs-creation bill that would collect $600 million in lost sales tax,” as estimated by state Comptroller Susan Combs. Bercu testified that by eliminating the eight- to 10-percent price advantage enjoyed by online retailers that do not collect and remit state sales tax, he believed “by a conservative estimate” in-state retailers “could increase the labor force by 10,000 new jobs” through increased sales.

In Texas, two bills related to sales tax collection on online sales are under consideration. HB 1317, introduced by Rep. Elliott Naishtat, is an affiliate nexus bill, and HB 2403, introduced by Rep. John Otto, would amend the state’s tax code to define a retailer as a company that has in Texas “a distribution center” or any other physical presence “where business is conducted,” as reported by the Austin American-Statesman.

Joining Bercu in Texas were Gregg Burger of Precision Camera and David Kruger of Kruger Jewelers, both in Austin. On March 27, the Austin American-Statesman published an op-ed by Kruger [3], headlined “Tax-free sales are not fair to local merchants in Texas.”